Before we had kids, my husband and I (Tina) lived in a one-bedroom, rent-controlled apartment in Washington, DC. After a few months, our heating bill started to be unreasonably high—much higher than was possible for a one-bedroom apartment in the middle of a building. We reported this to the utility company and to the landlord, but neither fixed it. For months, this went on and we paid $300 or more in heating bills until finally we broke the lease, lost our deposit, and had to move somewhere else.
Part of the reason that our landlord didn’t fix our heating problems may be because DC rent control laws stipulate (PDF) that when a tenant moves out of an apartment, the landlord can raise the rent to market rate. This means that our landlord had an incentive to get us out, whether directly through eviction or indirectly through not fixing problems in the unit.
This is a common complaint amongst tenant advocates and a reason why rent control might not be working as well as it could. Indeed, how policies such as rent control are designed is key to ensuring they make housing affordable.
In new research, we investigate how tenant advocates, landlords, developers, policymakers, and practitioners think about rent control, regulations that place hard caps on maximum rents or limits on the amount that rent can increase over time, and inclusionary zoning (IZ), which requires or incentivizes developers to create affordable units within market-rate developments. We also examine how components of these regulations affect these stakeholders’ incentives and behaviors.
Rent control and IZ are often implemented to support renters with low and moderate incomes, who often can’t afford market-rate housing. And because of structural racism and decades of racist federal, state, and local policies and programs, these renters are disproportionately people of color.
But do rent control and IZ increase access to affordable housing for renters with low incomes and people of color? We expected tenant advocates to say yes. And we expected landlords and developers to share they don’t support either because they put the burden of housing affordability on the private market rather than the public sector.
But what we heard was quite different: the tenant advocates we spoke with generally support rent control but not IZ, and developers largely view IZ as a beneficial but imperfect tool and are skeptical of rent control’s ability to provide affordable housing for renters with low incomes and renters of color.
Why do tenant advocates support rent control but not IZ?
Tenant advocates we interviewed generally support rent control over more supply-driven policies like IZ. This is partly because they feel that rent control helps mitigate power imbalances between tenants and landlords and increases civic engagement, which is often overlooked in traditional quantitative research. They feel that policy loopholes or weak regulatory coverage are to blame when rent control fails to improve housing affordability.
Advocates also feel that rent control does a better job of providing affordable housing to families with low incomes than other supply-driven policies like IZ. They said IZ comes with more costs than benefits because deals favor developers and do not provide enough truly affordable housing in exchange for the benefits developers receive.
[The IZ development] didn’t even fit into anybody’s—Black people, especially—notions of affordable housing. That’s why we were like, we can’t even campaign for or against this. This is just a waste of people’s time.
What do developers and landlords think?
Generally, the landlords, developers, and property management representatives we interviewed are skeptical of rent control’s ability to provide affordable housing for renters with low incomes and renters of color. They believe IZ is not a panacea to the nation’s housing woes; it is one tool in a toolbox of policies that influence housing outcomes.
Developers highlighted the US’s current underproduction of housing as a challenge; they said IZ can become counterproductive when policies are so restrictive that they prevent development from happening.
Developers, tenant advocates, and policymakers generally agree that complicated policies can limit the amount of affordable housing that is produced or preserved. Complicated IZ policies enable some developers to find loopholes and prevent land prices from adjusting to the IZ policy because there is no baseline standard to which all developers are held accountable.
Complicated policies also make entering the market difficult for smaller developers. For rent control, dense regulations are hard for both landlords and tenants to understand, which causes landlords to accidentally fall into noncompliance or prevents tenants from asserting their rights.
I would say the problem is that nobody believes that everybody’s going to be held to the same rules and regulations.…The lack of clarity about what is required of any builder is part of the reason why people don’t see eye to eye on land values and then development deals stall.
Because of these challenges, developers highly encourage jurisdictions to have a baseline policy that cannot be changed through negotiation. Consistency will likely affect a jurisdiction’s market dynamics because the policy will be perceived as legitimate and not subject to exceptions. It could also help address tenant advocates’ concerns that developers may find workarounds with IZ, receive incentives to provide very few units, and accelerate gentrification.
Policy loopholes and design of the regulations
These interviews suggest that the design of rent control and IZ policies is crucial to their ability to increase the supply of housing that is affordable to households with low incomes and households of color.
To help inform future policy design, we will use what we learned through this initial research to estimate the impact of various types of rent control and IZ reforms on housing supply, housing affordability, and access to high-opportunity neighborhoods. Our findings will inform policymakers seeking to create equitable and inclusive neighborhoods where people can afford to live, regardless of income or race.
The Urban Institute has the evidence to show what it will take to create a society where everyone has a fair shot at achieving their vision of success.